FTSE 250 ETF - MIDD vs VMID vs VMIG

george4064

I have an ISA portfolio, managed with strategic targets and is pretty much 100% equity.

Within my 10% (currently at ~16%, tactical o/weight) UK allocation I hold the iShares FTSE 250 ETF (MIDD.LON) which I have held for years and have never really bothered considering alternatives, particularly from a cost perspective. Any alternatives have to be an ETF to keep my overall platform costs down, and it seems the Vanguard VMID ETF is the most 'competitive' alternative.

I prefer to hold a distributing share class to give me flexibility with re-investing income, I always re-invest the income but not necessarily back into the same asset that paid the dividend. Lately I have been re-investing my MIDD dividends and sometimes topping these up from dividends elsewhere, all trades go through at £1.50 per.

Could the wise people here let me know if the iShares TER is before or after the securities lending return? And hence if my 'net TER' figure is a load of nonsense?

Should I bother switching MIDD to VMID or VMIG to save costs?

What UK equity ETFs do you use?

I have many years ahead of me so any reduction in fees will make a big difference over time with compounding. In addition, since this is a 'simple' index tracking ETF there shouldn't be any/much difference between different FTSE 250 ETFs so I'm inclined to switch to whatevers cheapest

Thanks in advance

On a side-note, I noticed that Vanguard Investor offers VMID but not VMIG - looks odd. But I'm with AJ Bell anyway, so doesn't matter.

Name: iShares FTSE 250 ETF (MIDD)
Methodology: Optimised (I'm assuming this means this ETF holds less than the 250 or 253 stocks within the FTSE 250, but still gives the same risk/return as the whole index?)
Product Structure: Physical
Use of Income: Distributing

TER: 0.40%
Securities Lending Return: 0.10%

Net TER: 0.30% (TER less securities lending return)


Name: Vanguard FTSE 250 ETF (VMID)
Methodology: Full 
Product Structure: Physical
Use of Income: Distributing

TER: 0.10%
Securities Lending Return: Not sure, if any

Net TER: 0.10%

Name: Vanguard FTSE 250 ETF (VMIG)
Methodology: Full 
Product Structure: Physical
Use of Income: Accumulation

TER: 0.10%
Securities Lending Return: Not sure, if any

Net TER: 0.10%

coastline

Performance figures seem to vary a bit on both selections. Maybe down to tracking error ?

Chart Tool | Trustnet

Low-cost index trackers that will save you money - Monevator

ETF Screener | justETF

george4064

coastline said:

Performance figures seem to vary a bit on both selections. Maybe down to tracking error ?

Chart Tool | Trustnet

Low-cost index trackers that will save you money - Monevator

ETF Screener | justETF

Yes, down to tracking error I would imagine. For example, BlackRock don't fully replicate the index but invest in a selection of FTSE 250 stocks which they call 'optimised' whilst Vanguard simply hold every stock in the index.

Thanks for the link to the Monevator article, I will have to check out the other ETFs on that list. Including for my US equity allocation too.

The Amundi UK Mid & Small Cap ETF looks interesting, physical replication and only 0.05% TER!

george4064

Thanks all for your comments. Whilst I do like the look of the Amundi UK Mid & Small Cap ETF (PRUK), my platform does not allow regular investments into that ETF so I have opted for the Vanguard FTSE 250 Acc. ETF (VMIG).

This will bring the TER down from c. 0.40% to 0.10%, for effectively the same product! Since I have many years of investing ahead of me that 0.3% difference compounded should make a huge difference.